In a survey released this morning by Scioto Analysis, 19 of 20 economists agreed that reducing Medicaid spending in Ohio by $37 billion over the next ten years will have significant economic ramifications in the state beyond loss of health insurance for current Medicaid recipients. This comes after the passage of HR1, the “Big Beautiful Bill Act.” KFF estimates that this bill will result in about $37 billion less being spent on Medicaid in Ohio.
Many respondents specifically identified the potential labor market impacts that cutting Medicaid spending could have. “Denying health care may reduce the supply of labor. If people are unhealthy, they will not be able to work,” wrote Charles Kroncke of Mount Saint Joseph university. Bob Gitter of Ohio Wesleyan similarly noted “More sick time, potential job losses due to missed time at work, and potential closing of rural hospitals.”
Despite this, the 12 of 20 economists did not believe that these cuts would cause a severe recession in Ohio. “$37 billion over 10 years or $3.7 per year is about a third of a percent of Ohio's annual GDP, unlikely to create a recession, especially a big one. However, it could contribute to a recession caused by something more major,” wrote Christian Imboden of Bowling Green University.
One economist who believed this would lead to a recession was Iryna Topolyn from the University of Cincinnati, writing “I am not certain about the severity of recession, but I am fairly confident that this cut will spur recession. The direct effect of reduced spending on medical services, amplified by the multiplier effect, will be observed in the short-run. Moreover, there will be economic loss due to sick days as a result of poorer health. Additionally, in the long-run there will be a negative effect of deteriorating human capital due to worse health outcomes.”
The Ohio Economic Experts Panel is a panel of over 30 Ohio Economists from over 30 Ohio higher educational institutions conducted by Scioto Analysis. The goal of the Ohio Economic Experts Panel is to promote better policy outcomes by providing policymakers, policy influencers, and the public with the informed opinions of Ohio’s leading economists. Individual responses to all surveys can be found here.